Recruiting new staff in a foreign country presents many difficulties for companies planning international expansion. Bradford Jacobs’ expertise in international recruitment is indispensable for expansion into China, where the employment market is wide open for suitable candidates and highly competitive. Our benchmark platforms as a Professional Employer Organization (PEO) are built on comprehensive knowledge of the economy and guarantee a trouble-free move into your new territory.
The Recruitment Process in China
Foreign companies recruiting in China to expand their operations will encounter significant differences with their experience of hiring in other countries. For example, contracts must be put in place by a legal entity in the country or China’s Labor Law may not apply. As a result, regulations tend to push companies towards forming a subsidiary, typically a Wholly Foreign-Owned Enterprise (WFOE) as a limited liability company.
Ahead of the recruitment process, bear in mind:
• April-May is a good time to source candidates, after any annual bonuses have been paid
• Check the candidate is not held to a ‘no competition’ clause by their previous employer
• International recruitment agencies cannot hire to fill temporary positions
Once a candidate is selected, the recruitment process includes the following:
• The employer or agent must register the employee with the Social Security Bureau and local Housing Fund
• Register with the State Taxation Administration
• Create contracts, which must be in writing for full-time employees
• Applying special expatriate status and research tax free allowances – note: taxation laws on allowances will change after January 2022
• Calculating monthly salary and creating payslips
• Submitting wage tax returns and social insurance registration
• Corresponding with involved parties
• Creating annual accounts and year-end statements
• Creating payment schedule for wage tax, social insurances and net wages
• Payroll records must be kept for at least five years
However, the simple answer to avoiding these time-consuming and unproductive demands is to engage Bradford Jacobs as your Employer of Record (EOR). We will convert your blueprint for expansion into China into an action plan, as follows:
• Bradford Jacobs step in as EOR through our legal Chinese entity to guarantee your employees comply with employment contracts, payroll, HR, tax and visas and work permits where required
• You have daily control of your employee, while Bradford Jacobs manage all work-related registration formalities
• Employee completes time sheets and approved expenses claims and we invoice you, the client. Once paid, we deduct all contributions to Chinese tax and social security authorities and transfer the balance into employee’s nominated account
Taking the first step
Within a few days your company has international presence in China, in prime position to explore further expansion without having risked the initial expense, commitment or hassle of setting up your own subsidiary or branch office.
Legal Checks you can make on Employees in China
Questions that can be asked during interviews are in theory governed by the Civil Code, but in practice are rather nebulous. However, some definite restrictions apply to female applicants, who cannot be asked about marriage or pregnancy status, with fines of up to 50,000 yuan ($7,600) for breaches.
China has strict protocols on where information is obtained regarding individuals’ privacy and data, although these have not been brought together under a single code which can lead to difficulties for employers.
But there are also helpful resources. The Ministry of Education’s national database allows employers to check higher education qualifications at the China Higher Education Student Information and Career Center (CHESICC) website at https://www.chsi.com.cn/en/
• Obtain applicant’s written consent before contacting a previous employer
• If required for a particular role, the candidate must apply for a Certificate of Non-Criminal Record Certificate. The prospective employer cannot apply
• At neither interview stage nor employment itself can employees be discriminated against on grounds of ethnicity, religious beliefs or gender
Basic Facts on Hiring in China
• Interview questions are restricted by data protection laws; previous employers can only be contacted with the applicant’s permission
• Only the applicant can apply for a Non-Criminal Record Certificate
• Apart from part-time workers, employment contracts must be in writing
• Probation periods are allowed but not mandatory
• Normal working week is 40 hours a week, eight hours per day with no automatic entitlement to breaks
• All workers have the right to join trade unions and collective bargaining agreements
• Employers must maintain an employees’ register and allow for a quota of positions for workers with disabilities
• Minimum notice period is 30 days, although termination without notice is allowed in certain circumstances governed by employment statutes
• Minimum wages are set by provincial governments after approval by the Ministry of Human Resources and Social Security
• All wages and salary must be in Chinese currency and ‘payment in kind’ is prohibited
• Overtime is governed by the Labor Law and should not exceed a total of 36 hours per month
Working with a Recruitment Agency in China
Many international recruitment agencies in China look to place candidates in the most popular high-end sectors such as bio-technology, automotive industry, medicine, logistics, new materials research, environmental energy and management.
At the state level, the Chinese Government introduced the “High-end Foreign Experts Recruitment Plan” in 2019 through the Ministry of Science and Technology, with the aim of attracting high-level foreign experts in key priority fields such as science and technology, innovation and development.
What are the Benefits of Outsourcing Hiring for China?
The major plus from outsourcing recruitment in China is streamlining international expansion by opening potential new markets quickly and cost-effectively. Companies can focus on planning and developing their new venture.
Advantages for the parent company include:
• A wide-ranging talent search undertaken by a Professional Employer Organization (PEO) with reduced recruitment costs
• Control over capital expenditure, as outsourcing removes the initial need to establish premises for a subsidiary
• Reduce risks with an ‘easy in, easy out’ operation while exploring fresh markets
• Quickly start new projects
• Focus on core business
• Improve flexibility
• Scale the global workforce to fit the pace of expansion
Take the next step with Bradford Jacobs
This is the moment to outsource recruitment and payroll by calling in Bradford Jacobs. Our Professional
Employer Organization (PEO) and Employer of Record (EOR) platforms will smooth your expansion into
China. We remove the risks of non-compliance with payroll, tax and social security regulations. Your new staff members are operational within days rather than the weeks or months it would take to establish a costly subsidiary, allowing you the time to plan for that further move.
If you are expanding into China and need to understand global recruitment without the hassle of red tape, contact Bradford Jacobs today.